Bitcoin and precious metals became negatively correlated in July

ChainCatcher news, the stock market plummeted on Monday, with arbitrage trading closing positions. Bitcoin's performance resembled that of stocks rather than gold, plunging 17% at one point, falling below $50,000, before recovering some ground.

Bloomberg compiled data shows that Bitcoin turned negatively correlated with precious metals in July. eToro analyst Josh Gilbert stated, "It is unrealistic to think that the reasons institutional investors allocate funds to Bitcoin are the same as those for gold. These two assets play different roles in a portfolio. If investors panic or want to deleverage, cryptocurrencies are often the preferred asset."

Some observers believe that Bitcoin's crash supports the view that it is an asset class particularly susceptible to potential dangers (such as the Federal Reserve waiting too long to cut interest rates, leading to an economic recession).